The mortgage-finance firm is backing loans used to buy single-family rental houses

Freddie Mac is expanding its role in financing one of Wall Street’s postcrisis success stories: the booming business of investing in single-family rental houses.

The government-backed mortgage-financing firm this month guaranteed a $509 million loan that helped Front Yard Residential Corp., an acquirer of rental homes, buy a rival. It also backed a $7.8 million loan that enabled Promise Homes Co., a midsize Atlanta landlord, to buy 117 houses in Southeastern working-class neighborhoods.